"After three weeks of stocks not doing much, ... this is the catalyst for stocks to continue higher," said Kate Warne, investment strategist at Edward Jones. "I think it puts to bed fears of a faltering economy."

"The big takeaway, for me, is the market is doing exactly what it needs to move higher," said Adam Sarhan, CEO of Sarhan Capital. "We're now getting confirmation about what the Fed has been telling; that the economy is going to pick up in the second half."

"It was a pretty good number," said Lindsey Piegza, chief economist at Stifel Fixed Income. "This is another data point that supports the thesis that the labor market is improving" after a sluggish first half.

"It's the second consecutive month where economists have been surprised," said Andrew Chamberlain, chief economist at Glassdoor, noting the labor market has now seen expansion for 85 months, the largest expansion since the 1990s.

Brendan McDermid | Reuters

Traders on the floor of the New York Stock Exchange.

However, Mike Wachholz, president of Pontoon, said "I think we've reached terminal velocity," adding he finds it difficult for the labor market to keep up this pace since businesses are under pressure to make the right hiring decisions, and "they know they have limited bullets in the chamber."

Investors kept a close eye on the report, as it may prompt the Federal Reserve to tighten monetary policy sooner rather than later. That said, Stifel's Piegza said the report "does seem to be a bit at odds with other data points," particularly the most-recent U.S. GDP growth number.

"I think the Fed is in a conundrum," said James Marple, senior economist at TD Bank Group. He said the central bank will be watching to see if the economy moves higher, in the direction of jobs growth, or lower along side business investments.

Meanwhile, the oil markets took a breather after two straight days of solid gains, with U.S. crude settling 0.31 percent lower at $41.80 a barrel. Weekly rig count data from Baker Hughes showed the U.S. added seven rigs.

U.S. Treasurys erased slight gains after the jobs report release, with with two-year note yield holding near 0.71 percent and the benchmark 10-year yield around 1.58 percent.

"The risk is to the upside in yields," said Kathy Jones, chief fixed income strategist at Charles Schwab. "I'm actually surprised the short end of the curve didn't move higher."

The dollar rose against a basket of currencies, with the euro near $1.108 and the yen around 101.8.

Earnings season began winding down Friday, with Allianz and Novo Nordisk, among others posting results before the bell. Next week, a slew of retail firms will be reporting quarterly results, including Nordstrom and Macy's.

"Retail gives you the best indicator of how the consumer is doing," said Howard Silverblatt, senior index analyst at S&P Dow Jones. He also noted that, while the market is near all-time highs "we have not moved much. We're settling on a trading range, but it's at the higher end.